Does anyone have information on Flagstar's new streamline short sale program?
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Dear SS Superstars,
Early last March I put an offer on a short sale and three months later the bank sent it's counter offer. We excepted the offer and were told that we should have our approval letter from the bank within two weeks. It has been nearly 6 weeks now. Two weeks ago a letter was posted on the front door with an auction date. Our realtor told us not to worry. Should we? It sounds to me like there is a serious communication problem somewhere. I would like to give our realtor a chance to do his job but is there something that we should be doing?
Thank you for your comments.
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In Redwood City from Jan 1, 2012 until June 30, 2012 there were:
46 closed short sales
22 closed bank owned homes
Total sales during this time period were 363
Total % Short Sales: 12.6%
Total % REO Sales: 6%
Total Percentage Redwood City Distressed Properties: 18.6%
18.6% of all Redwood City sales being distressed is enough to still haves some effect on the overall market. However, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level it probably will not have a long lived effect. It is interesting to see there are twice as many short sales as bank owned sales.
If you have any questions about short sales or foreclosures in San Mateo Clara County please feel free to contact me.
Marcy Moyer
marcy@marcymoyer.com
650-619-9285
DRE 01191194
I have been working on a Redwood City short sale with Chase since last September. Now if this were 2009 this would be more like dog bites man rather than man bites dog. But it is 2012 and most short sales do not take so long. However, this one has a 3rd loan for a lot of money and it slowed the process down.
Selling the property at market value was not that hard, despite being on a fairly busy street. We got an offer for $510,000 and a BPO for $510,000 so it started out ok. By December I had approval on the first and second with a payoff of 6K to the third who had previously owned the home and had a $120K note on the property.
Third lender said no way. He wanted 65K as a note from the seller or cash from the buyer.
Buyer and seller said no. Buyer walked.
House went back on the market and we got another offer right away. This was February.
Chase did a new BPO and said the value had increased to $560,000. New buyer agreed to pay the 3rd loan 50K plus $560,000 to chase. After several months Chase said no, they were not going to allow the third lender to get so much money. That was May.
We were then told to try submitting a new offer to see if we could get a different answer. Well that sounded like the definition of insanity to me, but we tried. So we submitted a new offer of $562K plus $50K going to the third lender. Keep in mind that every month during all of this we had to get Chase to postpone the trustee sale.
So several weeks ago the new offer for the Redwood City Short Sale got to the new negotiator who ordered a new BPO. She said the BPO's value had not changed again and the offer was fine as it was. I asked about the issue of the third lender getting so much money and she said she thought it would be fine.
I was doubtful, but she was right. Today we got a Short Sale Approval Letter!!!!! I never believed this would happen but I persisted anyway and it was worth it.
So now my Redwood City Short Sale has Chase Approval, my sellers can get on with their life, the buyer has the home of his dreams, the third lender who is a human, not a big bank has at least a good portion of his money back, and Chase can get a bad performing asset of their books as well as market value for the home. We all won on this one.
If you have any questions about buying or selling a short sale in San Mateo or Santa Clara County please feel free to contact me.
Marcy Moyer
Keller Williams Realty
marcy@marcymoyer.com
650-619-9285
D.R.E. 01191194
Anyone with experience in short sales and REO's know the bank requires proof in writing that the buyer has the necessary funds for the purchase of the property. If the buyer is paying cash I have always advised them to obtain a letter from their bank stating they have the necessary funds for the transaction.
In a recent short sale where I had the listing, the buyer submitted a letter from his bank signed by the Vice President of Banking which included his contact number and email.
The negotiator with the bank would not accept the letter as proof of funds and asked for a copy of the buyer's account statment. His reason was the wording "access to cash currently on deposit". He said the buyer could move these funds from this account into another account at any time. I responded by saying the buyer could still move funds from an account after he gets a copy of the bank statement. He simply said "A bank statement would be different".
I understand an actual copy of the bank statement is a harder proof of funds, but if there is any issue, the negotiator could call the Vice President and get clarification. If the letter was truly a fraud then what would be the end game? Not closing? I don't understand why banks are making the process more difficult than it has to be. In this case, it ended up being an acceptable offer and went to closing.
Please visit Seattleshortsaleblog for the full article
Many homeowners whose homes are underwater are choosing a strategic default as an exit strategy for their situation. A strategic default is when the borrower voluntarily stops making mortgage payments although able to continue payments. The purpose of this is so you will have options such as the popular exit strategy – a short sale. Is this a good strategy for homeowners?
One factor to agree on in a strategic default is, continuing to put your money in a home that is clearly bringing you no return is a bad investment from a business perspective. However, I do not endorse a strategic default if you can amply afford your mortgage payments but wish to walk away from the home solely because it is underwater. It would be unethical and your losses would be much greater than what you simply calculate (difference between principal amount owed and sales price). Remember, you are losing years of mortgage payments and interest as well as your down payment and your future lenders will be able to see this conduct when applying for a new loan. More information is here on Dave Ramsey’s site.
The issue with this strategy is, you do not have to be in default in order conduct a short sale on your property. The popular (but ultimately false) notion is that you must be in default in order for lenders to allow a short sale. This is not true even if you have money in your savings and/or other retirement accounts.
How are you able to avoid defaulting and damaging credit AND still short sell your home? Show Inevitable Financial Hardship. If you can foresee an inability to make payments in the future 6/12/18 months from now, lenders will allow a short sale on your property. Our d have closed multiple short sales without their clients missing a single payment.
You may be wondering, what if they check and find I have money in the bank and deny my short sale request? From our experience, the only financial statements they request are bank statements and very rarely will they ask for more information beyond that.
What is the incentive for not missing payments prior to short selling? It saves your credit from being severely damaged. On June 1, 2012, 3 major credit reporting agencies announced that the impact of short sales on a borrower’s credit will be significantly reduced to little to no negative credit ramifications if the homeowner stays current. Also, if you haven’t missed any payments prior to short selling, it may be possible to obtain another mortgage immediately.
What do you think about a strategic default?
Please feel free to share/link articles from www.seattleshortsaleblog.com - it is filled with a plethora of information for distressed homeowners.
Hope this helps
Peter
“BPO” stands for “Broker Price Opinion.” It is a report for the given value of a property, that a real estate agent will give to a lender to determine what to do with a property where they have a loan. And it is just what it sounds like, an opinion! All they do is quickly glance at the recent solds in the neighborhood, and go to the house to take pictures(they are at the property no longer than 10 minutes – a time frame that no buyer would feel comfortable making a solid offer in, given that it is not enough time to do any due diligence on a property to see what it has/needs.
Without going into too much detail here, let me just tell you I met both an appraiser and a BPO agent at a property yesterday, on a property valued somewhere in the $2 million range. Because I met both the agent doing the BPO, and the appraiser, the property will close because they have a keen understanding of what is really going on, since I took the time to enlighten them. Can you imagine if I just left it up to the opinion of the two people who had spent no more than a couple of hours looking at the subject property?!(and in cases of cheaper house, taken no more than maybe 20 minutes analyzing the value!)
And then this morning I met another BPO agent on another property we are doing a deal on, valued around only $100,000. The property probably would have came back to the bank with a broker price opinion at $130,000 or more if I hadn’t been there to meet the agent, in addition to sending her comps and letting her know the listing history prior to her arriving at the property. I also took the time to make sure she actually looked at all of the systems in the house and pointed out needed repairs. Had I not been there the agent would have not seen any of the needed repairs or structural issues to the house. These things have a significant impact to the buyer and many agents fail to realize they have two ends of each short sale transaction to work, not just the buyer, but the bank too!
If you were to ask a room full of real estate agents what the biggest factor is in the success of a short sale transaction, I would presume you would hear dozens of different answers. Answers ranging from how severe the homeowners hardship is, to how much money in retirement accounts the homeowner has, to whether or not the person that is on the loan actually ever lived in the house or was just a cosigner, or the most common…”who is the bank?” I would like to think one or two agents would get it right, but would be surprised to hear much more than that. While these factors do play a role in the short sale settlement, they are not THE most important factor.
The answer is simple, and it only contains three letters: BPO. The BPO is the hinge of the entire short sale. If you have a high BPO you are probably not going to close your short sale, unless that is of course, if you can get another BPO ordered and have enough time to go through that process. I have seen more short sales go to foreclosure because the BPO was not addressed properly then any other reason for short sale transactions not closing.
It takes approximately 10 minutes to comp a property(look up current home sales) and send that email to the agent who is processing the BPO, prior to them arriving at the property. It takes usually no more than an hour to drive to the property, meet the agent there, and then tell them where your offer is and the listing history, shake their hand and walk away. Sometimes you may leave the property feeling like you are going to get a high-value, and sometimes it will be the opposite, where you will leave feeling energized and know that you are going to have a slam dunk deal when the bank finds out they are getting more money out of the transaction after their closing costs then the true value of the property.
Setting up properly and processing the BPO correctly as the listing agent will be the deciding factor in 90% of short sales. I don’t care what the hardship is or how much excess cash the seller has, or even how much assets they have or none of that. I care what the value is and what the net is to the lender. Since I do have control over these things, contrary to popular opinion, I close consistently the short sales I take on.
It’s not rocket science.. Influence what you have control over. This is no different than anything else in the real estate business or for that matter, life.
To inquire about referring Joshua Gayman a short sale in the Arizona area or for assistance with negotiating a short sale of your self or for a client, or if you are a homeowner and another state just looking for guidance and true counsel, give me a call – I’d love to chat!
-Joshua Gayman
Rock Realty Client Testimonials
"Mike Collins helped us sell our home, he was a very nice guy and always there when we had any questions or concerns! Mike went above and beyond and even helped paint the house when there was a time crunch for the inspection. We appreciated all that Mike did!"
Katy K.(Janesville, WI)
Rock Realty Client
This is certainly a new twist to an old problem. Bank United is the first lender on a California short sale. The negotiator is stating that Bank United "charges 1% for their short sale processing" (of their own non-performing asset). This 1% charge isn't disclosed anywhere in their short sale package, nor does the buyer have the additional 1% (over and above the repair costs they will be paying due to buying the home As-Is). Just another way to pick the pockets of Realtors.
Has anyone successfully battled this with Bank United? I would love to hear from you!
Does anyone know the answer to this question. I have a short sale with B of A. And they are paying as less as possible to close the deal. They wont pay HOA transfer fee as asked for in buyers offer. Now my buyer is saying he's not paying becasue he does need a copy of the CC & R's becasue he can get one from his friend who lives in the same association. Per my knowledge new cc & r's are needed for each new buyers name. He wants me to tell BofA and HOA he's not paying the HOA transfer fee $250, and lets close the deal. Can this be done???
In Menlo Park from Jan 1, 2012 until June 30, 2012 there were:
9 closed short sales
9 closed bank owned homes
Total sales during this time period were 227
Total % Short Sales: 4%
Total % REO Sales: 4%
Total Percentage Menlo Park Distressed Properties: 8%
8% of all Menlo Park sales being distressed is not enough to have any effect on the overall market. This is evidenced by the appreciation and high activity level of the market.
If you have any questions about short sales or foreclosures in San Mateo Clara County please feel free to contact me.
Marcy Moyer
marcy@marcymoyer.com
650-619-9285
DRE 01191194
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So I got a call to go meet some potential clients to list their home short. Set the time, got my Short Sale info together along with the development info and off I went.
Lovely, older couple that were so scared and confused and very sad about losing their home. He's 80, she's not much younger and they did NOT want to give it up yet.
So..I did my job as a Short Sale List Agent with integrity. I educated them. Spent almost 2 hours with them sharing the ins and outs of a Short Sale with them. The timeline they are looking at since they are still current on their payments. The other options available to them at this time..refinance? Loan mod?
They decided to contact their Lender and see what else was available.
As I was leaving, he said, "Thank you so much Kimberley. What do we owe you?"
I laughed. "Nothing. I'm just doing my job. I hope you will give me a call if you do decide to sell your home."
They both said that was a sure thing.
Sometimes, our job is to share what we know about the market and short sales..not walk away with a listing.
You may be asking yourself, just why should I hire a Short Sale Negotiator?
Let’s start by stating that a dedicated short sale negotiator can be invaluable to the success of a short sale! An experienced and successful short sale negotiator has established many relationships with many banks. They know the ins and outs of how to best handle each individual short sale. Each short sale is unique with respect to the seller’s situation and their individual bank’s requirements. The process becomes even more complex when there are two or more loans and additional liens with multiple banks.
While the seller’s agent may be able to negotiate directly with the bank, a dedicated short sale negotiator who specializes in short sales will often produce the best results for the seller and the buyer. They can typically obtain approvals from all lenders in a more favorable time frame and know the best terms that can be negotiated. Considering that a real estate agent may process a few to several short sales per year, a dedicated short sale negotiator may handle hundreds or thousands per year. This means the negotiator is in regular contact with most banks, establishing cooperative lines of communication, while keeping up to date on all industry and specific lender changes. They also are aware and experienced with special programs that are available to offer even greater incentives to the home sellers.
In addition to all of this, the following are also benefits to hiring a short sale negotiator:
- Free up time! They assist with the collection of all of the short sale paperwork and package
- More time to market for more listings instead of spending time on the phone with the lenders
- Focus on core competencies and delegate the rest of the workload!
- You are the hero because you were able to put together a stellar short sale team.
- Receive full short sale approval quicker due to the knowledge and experience of the negotiations team.
Now, remember…not all short sale negotiators are created equal. At Short Sale Experts INC, we offer that and much more! We have proven track record of success and have many raving clients! With our brand new member website, you can obtain all the information pertaining to short sales that you could want, for FREE! We are able to take your file off your hands, and hand you back an approval letter in record time. We value our clients so much and want nothing more than to help them market and build relationships within the real estate community here in San Diego.
Call us for more information: 888-746-7820
Hi Everyone,
I have a situation where the father of the property owner is a licensed real estate agent. The owner is in default and would like to proceed with a short sale. Is there any conflict with the "Arms Length Transaction" if I pay him a referral fee? Has anyone else encountered this? Thanks.
Hello all,
I have made an offer on a property since August, 2011 and I finally got an approval with a closing date of 8/10/2012.
Here are some of the details:
*There is one loan and 2 lines of credit with two different banks.
*The lendor is Bank of America - They have approved the 1st loan
* I hired a negotiator and she told me that she is in the middle of the negotiation stage with the two companies that carries the lines of credit and she should have any answer very soon.
*Bank of America has already allocated funds to these companies to release the liens so I can close this deal.
Question:
Do you think I am near closing? It will be a year next month since I am waiting to close this deal.
Best Regards and thank you very much for your feeback.
My home has been in forclosure for over a year and I have had a short sale offer since August of 2011. I can't seem to get an answer as to why this is taking so long. My loan is with Wells Fargo. Does any one know of way to get this to move faster. Very frustrating! Lorisa
Rock Realty Client Testimonials
"My first listing contract (with another agency) expired without a single showing. I contacted Mike Collins hoping to get some straight advice about whether he thought the property would ever sell versus letting the lender foreclose on the property and save my mortgage payments for legal counsel. He was upfront from day one. He told me that it would take a while and that I'd probably have to hold it through the winter (I called him in September) but it would probably sell in the spring. His honesty made me immediately willing to hire him. He found a buyer in May and worked with my lender to close the sale in record time."
Drew V.(Marshall, WI)
Rock Realty Client
I've been working a short sale since Jan with a first (GMAC) and a second (Chase) which was set to close last Weds. But Tues the home burned down in the Colorado Springs firestorm. The purchase price we had was $265,000 with the first getting $233k and the second getting $5k - all approved and ready to go. FC sale date is 9/26. My question is has anyone ever had a successful short sale using insurance proceeds to short the lenders? The proceeds at $277k are more than the purchase price we had and if we could get the lienholders to release the notes, it would be better because the second and the real estate commission would be settled as well. The seller became deceased after we were under contract and the family does not want to leave the pile of ash as a bank-owned property for the neighbors to deal with - even though it's a complete burn area many of the residents want to re-build there. If this were accepted, the family would wind up with the land and clean it up with other proceeds and sell later. Any insight or experience would be appreciated!
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